The changing fundamentals of media

Jeremy Allaire, founder/CEO of Brightcove and one of the brightest minds in technology, wrote in his predictions for 2008 that nothing about the Internet changes the fundamentals of media, adding that “value is created by controlling the content or controlling access to the audience.”

“Media companies with established brands and new start-ups,” he continued, “will continue to build successful branded destinations so they can control the access to audiences.”

This is quite a statement and one that bears close examination in light of disruptions to mass media, disintermediation, unbundling and the escalating fragmentation of media. I believe that the Internet does change the fundamentals of media, so I can’t support Jeremy’s positive view in this concept.

Brightcove, it should be noted, is ending its video upload service and abandoning the potential for any “market” in the world of user-generated content. In a blog post on the topic, Allaire said it was a decision based largely on the growth of its professional video business, which is substantial. This move — and Jeremy’s thinking above — clearly indicate that Brightcove is linking its star to the world of traditional media. And why not? There’s considerable money involved.

However, what’s good for Brightcove doesn’t validate the statement that the Internet doesn’t change the fundamentals of media. Let’s talk about that, for all business beliefs are built on assumptions, and there’s a big one here:

“Content” is so valuable that people will follow whatever path is required in order to satisfy their eyeballs, including participating in whatever is required to pay for that privilege.

This is a very dangerous assumption for any media business attempting to “control access to audiences.” It’s a purely mass-marketing concept, and it ignores a few things about the Web.

First of all, the “branded destinations” spoken of aren’t unique in the architecture of the Web, and this is a problem. It doesn’t matter how many people “visit,” how long they stay, or what’s available through any particular URL, the Web considers them all the same, what I call pixels on a page. Therefore, any system of control is fragmented to the nth degree. Cable changed the value proposition of broadcasting, and the Web does the same to cable. We can spin things with HDTV and other things like specialized content, etc., but the dynamic is the same as what drug companies do when patents expire on their products. “Time-released” becomes the selling point, not the product itself. But people — who are driven by price — go for the new generic. Same with content creators. No matter how we spin it, it’s just another pixel on the page in the architecture of the Web.

So from a structural perspective, the media value proposition is lessened, because the eyeballs necessary to earn from that “value” have thousands, if not millions, of other choices. Moreover, as content becomes more and more commodified, it gets harder to identify any of it as “special.”

Secondly, the assumption requires a belief that this “content” has sufficient qualities to compel the eyeballs in the first place. This, too, is a problem, because the creators of professional content have known for about a decade that it’s getting harder and costing more to create the ultimate mass marketing goal — the blockbuster. There are many factors at play here, but the one that the creators least wish to discuss is that content built on previous success — that is to say content based on research and history — does not necessarily lead to audience growth. And without growth, the fundamentals are meaningless. Hollywood, the record companies and the rest of the copyright industry are largely victims of the crap they’ve been producing for years. But crap is easy and it’s profitable.

It is into this paradigm that the personal media revolution has blossomed, people educating and entertaining themselves with technology’s help. The value of YouTube has never been in the distributing of the kinds of content described in media accounts of pirating, etc.; it has always been about growing communities entertaining themselves. Professional video creators can scoff at and discount this all they wish, but eyeballs viewing this are eyeballs that once needed the restraints of those creating value through restricted access and so forth.

Thirdly, and perhaps most importantly, this assumption dismisses the contemporary reality that advertisers — the people who funded the assumption in its earlier times — don’t need the content anymore in order to do business. Advertising IS content in Media 2.0, and where money is spent by advertisers in creating their own content, it is not being spent on supporting the content of Jeremy’s “branded destinations.” Some advertisers are actually becoming their own media companies, and while this may help Brightcove’s business, it challenges the assumptions of traditional media.

The problem may not be that the value proposition of media is changing as much as the definition of media itself, which is why I believe media companies must proceed down simultaneous strategic paths — monetizing their “content” as best they can but also moving to portfolio companies by innovating in the world of advertising and Media 2.0.

Comments

  1. this sort of thinking is distant from reality in that facebook tried to get the boss (audience) to “pay a price” and it blew up in a matter of hours.

Trackbacks

  1. […] Terry Heaton’s PoMo Blog » Blog Archive » The changing fundamentals of media “Brightcove is ending its video upload service & abandoning any “market” for user-generated content. Linking its star to traditional media. But what’s good for Brightcove doesn’t mean that the Internet doesn’t change the fundamentals of media.” (tags: media+evolution shortsighted business business+models analysis future tidbits+fodder) […]

  2. […] The changing fundamentals of media — Terry Heaton “Jeremy Allaire, founder/CEO of Brightcove… wrote in his predictions for 2008 that nothing about the Internet changes the fundamentals of media, adding that “value is created by controlling the content or controlling access to the audience.” (tags: internet media economics business marketing) […]

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